Facebook’s Libra back in the news – CEO Marcus tweets before BIS confab

Libra's David Marcus initiates positive public relations campaign on CNBC

The Libra “coals” are heating up again. The Bank for International Settlements (BIS), the central bank for all other central banks, is concerned about the Libra Project. At its behest, it has arranged for a major meeting to take place between representatives from Facebook’s Libra executive team and officials from 26 central banks across the globe, including the U.S. Federal Reserve and the Bank of England. Benoit Coeure of the ECB will act as chairman and lead the discussion. JPMorgan staff will also be in attendance.

David Marcus, the CEO for Calibra and focal point for most of the previous verbal abuse, took to Twitter before the meeting to calm the waters:

Recently there’s been a lot of talk about how Libra could threaten the sovereignty of Nations when it comes to money. I wanted to take the opportunity to debunk that notion.

Cointelegraph went on to report David’s remarks as:

The Libra cryptocurrency project does not intend to form a new currency but rather build a better payment network and system running on top of existing currencies to deliver meaningful value to users over the globe.

He emphasized that:

There is no new money creation, which will strictly remain the province of sovereign Nations.

Marcus went on to stress that his organization welcomes comments from all central banks, regulators and policymakers to make sure that all entities are at ease with the Libra program. Its stablecoin will consist of only strong currencies. In that regard, the Libra company expects and requests strong regulatory oversight to ensure that everyone is comfortable with the “1:1” relationship of its stablecoin and reserves on hand.

According to the Financial Times, prior to the Tweet from Marcus, a Libra spokesperson spoke of welcoming talks with regulatory bodies:

In the nearly three months since the intent to launch the Libra network was announced, we have prioritized engagement with regulators and policymakers around the world. We welcome this engagement and have deliberately designed a long launch runway to have these conversations, educate stakeholders, and incorporate their feedback in our design.

Leading up to the BIS meeting held this past Monday in Basel, Switzerland, Agustín Carstens, general manager of the BIS, pointed out that:

A key part of assessing new initiatives is to understand the details […] When such initiatives cross national borders, it’s important for regulators to coordinate and come to a common understanding.

The BIS staff arranged the meeting ostensibly to discuss the Libra Project, as well as to talk about stablecoins, the primary reason why the JPMorgan project team’s attendance was also requested. The 26 central bankers were to quiz Libra representatives about concerns over “the threats that Libra might pose for financial stability”. The meeting also served as a forum to air issues related to stablecoin projects under development by financial institutions and tech firms.

European officials have also made public statements prior to the Monday meeting, as well. French Finance Minister Bruno Le Maire went so far as to say:

I’m deeply convinced that we should refuse the development of Libra within the EU.

The German government agrees with the French position and sees little chance that it would ever authorize a stablecoin type project for the EU.

Bloomberg subsequently reported that Benoit Coeure, an ECB member and appointed chair for the BIS meeting, commented:

As a new technology, stablecoins are largely untested, especially on the scale required to run a global payment system. They give rise to a number of serious risks related to public policy priorities. The bar for regulatory approval will be high.

The meeting on Monday has concluded, and very little in the way of information has been forthcoming. Any findings from the meeting will be included in a report to be given to G7 nations prior to their October meeting. Press accounts did include one other tidbit – Coeure is also expected to give the G7 an update on the ECB’s little-talked-about digital currency project. Work on a digitized “EuroCoin” has actually been in the works long before the Libra announcement last June.

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